The Business of Government Hour

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Michael Astrue

Thursday, March 1st, 2012 - 13:54

Phrase:

As Commissioner of Social Security, he has focused his efforts on reducing the disability backlog and improving service to the public, particularly through electronic services.

Michael Keegan: Welcome to The Business of Government Hour. I’mMichael Keegan, your host and Managing Editor of The Business of Government Magazine. For over 75 years the U.S. Social Security Administration, or SSA, has touched the lives of virtually every American, whether it is after the loss of a loved one, at the onset of a disability, or during the transition from work to retirement.

Today, however, SSA faces complex management challenges that are linked to the profound demographic and system changes happening in the country. It is at this historically critical juncture that SSA has sought to enhance its ability to meet its mission, eliminating claim backlogs, reversing negative trends, improving services, and demonstrating the nexus between adequate funding and the ability to deliver real and measureable progress.

What is the Social Security Administration doing to reduce disability backlogs? How is SSA improving service and stewardship efforts? What does the future hold for the United States Social Security Administration? We’ll explore these questions and so much more with our very special guest, Michael Astrue, Commissioner of the U.S. Social Security Administration.

Michael, it’s great to have you back. Welcome.

Michael Astrue: Thank you for having me back.

Michael Keegan: Also, joining us from IBM is Nicole Gardner.

Nicole, welcome. Always good to see you.

Nicole Gardner: Always great to see you, Michael.

Michael Keegan: So, Michael, before we delve into specific initiatives, and I understand that our audience is quite familiar with the Social Security Administration, but I’d like for you to provide some context, could you give us an overview of the history and mission of the SSA?

Michael Astrue: We were founded in 1935, and we’re one of the largest federal agencies. We have about 65,000 federal employees and about 16,000 state employees, who work exclusively for us around the country. We have about 1,500 physical facilities. Most of them are field offices, but we also have offices for hearings. We also have offices that do a lot of our back office work to make sure that particular types of checks get places, particular types of authentication get places.

Michael Keegan: So with such a critical mission, could you give us a sense of the operational footprint of SSA? How is it organized? Size of its budget? Geographical footprint?

Michael Astrue: Sure. Our headquarters has been in Baltimore from the beginning. It’s a historical accident. It was the closest place to Washington, D.C. where they could find a building sturdy enough for the original equipment that we needed to print cards and that type of thing. So we originally started in the harbor area, Baltimore, and then in the 1950s moved to Baltimore County on the outskirts.

We have a little over 11,000 people who work in headquarters. We’re fairly hierarchical. We have a very large deputy commissioner for operations office. About three-quarters of the employees work in what we call operations. We have 10 regional offices. It’s the structure that we inherited from our former mother agency, HHS, so we have the exact same regional structure that they have, which has been pretty much unchanged, I think, since 1962.

And those 10 regional offices have managers who supervise a handful of field offices. Those are called area directors, and then we have field office managers. We have about 1,250 field offices now, and the area director supervises a number of those.

And most of the people who work for the agency are on the front line, trying to help people in field offices. That’s really where the bulk of our people are, but we have a whole range of people. We have actuaries in Baltimore. We have people who work on policy. We have about 4,000 people working in systems.

We retain a lot of records. We are the largest repository of medical records in the world. And we have all the normal functions that any large organization has, people who do facilities and things like that.

Nicole Gardner: So let’s transition to you and the specific roles and responsibilities that you have, can you tell us a little bit about what you’re specifically responsible for? And, also, can you tell us how does an SSA Commissioner get selected, and what’s the tenure for the post?

Michael Astrue: Sure. The responsibilities are very operational. There’s been an understanding since we became an independent agency that some of the big policy issues on solvency are more properly handled by the Secretary of Treasury. So there are certain types of questions that I defer over to Secretary Geithner because that’s the understanding these days.

So the job is very operational. But a lot of people don’t appreciate because we’re so associated with retirement, and that’s where the bulk of the program money goes. The bulk of the administrative activity goes to processing, this year it’ll be about 3.2 million disability cases, and that’s up substantially because of the recession. That is because there’s a correlation when times are hard and more people apply for disability.

And it’s very labor intensive. It can be a thousand pages of medical records. We have to go back over employment histories. It’s a very labor intensive, time consuming thing. And for Title 16, which is the Welfare Disability Program, we also have to go into detail on income and assets and that kind of thing. So it’s very labor intensive, and most of the actual work of most of the people is actually on disability, not on retirement.

My term is a six-year term. I think among people that work on nominations it’s called a soft term rather than a hard term. So when my term is over January 19th of next year I don’t have to leave immediately, I’m allowed to stay until a successor is confirmed. I think that reflects an intent by Congress to try to maintain continuity.

I think the statute, which has its pros and cons, has been relatively successful on that. My predecessor was the first one under the Independent Agency Statute, and she stayed just over five years. I hit five years on Sunday, and that’s substantially longer than the history. I mean part of the reason why we have the statute is that there were a lot of acting commissioners and a lot of commissioners staying for relatively brief periods of time. So the Statute was an attempt to try to give the agency a little bit more continuity in operations.

Michael Keegan: Yes, congratulations on the fifth anniversary.

Michael Astrue: Yes.

Michael Keegan: So, Michael, regarding your responsibilities and duties and the number of demographic changes that are happening and the trends that folks are facing, what are the three top challenges you’re facing, and how have you sought to address those challenges?

Michael Astrue: Well, certainly, when I accepted the job the biggest obvious challenge was getting ready for the Baby Boom. As I started, the National Academy of Sciences had just issued a report saying that the agency was woefully unprepared for the Baby Boom and needed to really improve electronic services in order to manage the workloads and those sorts of things.

And then I came in, the agency was rejecting most of that advice, and I read that report and said, no, these people are pretty much right. It became part of the blueprint for moving us forward. So we moved to get the best usability that we possibly could to reach out to new constituencies, and we’ve been very successful.

The University of Michigan measures private sector and public sector electronic services. Most of the big organizations in this country use it. We have the three best in the federal government and four of the top five, and we do better than Yahoo and Google and places that most people would think would be better than we are.

And so we’re very proud of that, and it’s allowed us to be much more efficient and to manage the Baby Boom. And that’s why we did it, but it turned out that if we hadn’t done that when we did it we would have just been rocked back on our heels by the recession, dealing with the added workloads of the recession has been hard enough as it is, but if we did not have the electronic services we would have been moving backwards in terms of most of the metrics for serving the public.

And we were able, despite the increase in workloads and in the last two years very severe budget cuts, to still improve in terms of most key service metrics to the public, and the electronic services has really been a pivotal part of that.

Nicole Gardner: So let’s talk a little bit about how your career began, what were you doing in the beginning, and then what are the things that led you all the way to this point in your leadership role with SSA?

Michael Astrue: Well, people look at the resume backwards and see a plan, and they don’t realize that there was a lot of improvisation. You can only just draw that line in hindsight. So I graduated college, my fiancee and I were classmates, and we were I think the only people that had literally no career plan. I had wanted to be an English teacher, but had been teaching summer school and decided that I didn’t have the patience to deal with children fulltime.

And so I didn’t really know what I wanted to do, and neither did my, now, wife. And so we debated and just decided we would go to Washington and try to get jobs on Capitol Hill. I had never been to Washington, and my wife had only been on a fifth grade field trip. So we came, and we got jobs on Capitol Hill.

I bounced around a little bit and finally decided I was going nowhere fast. I went to law school. And I had been working with a number of candidates on issues relating to aging. I had worked briefly for the National Council of Senior Citizens, and started developing a little bit of a niche in that area in my political activities, when I thought I would go and practice law. But it wasn’t very long before I got a call from Secretary Heckler’s Office in 1985. They were looking for someone to lead Social Security and other Welfare programs in the legislative area. So that seemed pretty exciting to me.

So in ’85 I came down, and I spent almost eight years mostly at HHS, but also at the White House working primarily in Social Security, Welfare programs, Social Service programs. When I came back to HHS in ’89 as general counsel I was working more in the Medicare, FDA area.

So when I left, I had some intention from the biotech industry. I left in ’92, and I spent 14 years working in biotech, originally as a general counsel and then as CEO of a couple of publicly traded companies. So during my long vacation from the government that’s what I was doing.

And I think that was helpful for me, when I came back, because, one, I had the opportunity to manage real operations because I think managing lawyers is very different. And I think the other thing is having been immersed in the biomedical world and seeing how things change and what information is available, when I came back and looked at our paradigms for doing things at Social Security I think that we were in paradigms of several decades before, and that we could do our work much better by handling medical information in very different ways than we do, than we had been doing.

We’ve made great progress, and were actually very eager to take the next step, and were actually ahead of the private sector because we’ve been enthusiastically preparing for health and information technology. We’re dying for all Americans to have a personalized electronic medical record because an enormous amount of time, money, and effort in our administrative operations will become very efficient when we can simply push a button and get a full medical record.

We’ve had some very successful pilots, and we think that we’re going to be announcing a contract with the first large insurance company to provide these types of records to us on a regular basis, probably over the summer.

Michael Keegan: So, Michael, I’d like to talk about your leadership style, and peer into that. What makes an effective leader? And, more particularly, who has influenced your leadership style?

Michael Astrue: I think there have been a couple people that have influenced my leadership style. One of the CEOs at Biogen, when I was there, was a very strong, charismatic leader named Jim Tobin, who subsequently became CEO of Boston Scientific. And one of the things that he stressed and my friend, Charley Baker, who ran the largest HMO in Massachusetts, stressed to me, is really being fearless in terms of communication.

I think that so many executives are afraid to say what’s true. And I think that if you’re going to have people follow you they need to know what you’re trying to do and why, and they need to believe it. It has to be authentic.

And so one of the things that I’ve tried to do at Social Security, which is similar to what I did in the private sector when I was doing a turnaround of a biotech company, is really communicate very regularly and personally with the employees. And there was some real resistance to that at Social Security in the beginning. I mean a Commissioner’s broadcast was a relatively rare thing, and it was conceptualized as only being for certain events, and it had always been said in the same way. And you really couldn’t distinguish most of my predecessors, you know, you could put them on a table and you couldn’t tell who had said them.

So for whatever else you might say about me I do have a somewhat distinctive style, and I think the people in headquarters all of a sudden said, you know what, that really is resonating with people, when he sends out a broadcast it might not be the way I would say it but they know it comes from him. And I think that that matters.

And so, you know, now this week we’re doing some fairly substantial shifts in resource because Congress looked like they were going to shift us very much into program integrity work. That passed both Houses, they kept telling us this was going to happen, we geared up for it, we prepared for it, and then they did something radically different. So we’re shifting, it’s sort of rippling around the organization, and I think that I felt a very strong need to explain clearly and in detail to people what we were doing and why we were doing it.

And I think that’s underestimated in terms of good leadership, so I think the most important thing in lots of ways is very regular, very clear, very candid communication.

Michael Keegan: What is SSA doing to reduce disability backlogs? We will ask Michael Astrue, Commissioner of the U.S. Social Security Administration, when our conversation continues on The Business of Government Hour.

(Intermission)

Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today isMichael Astrue, Commissioner of the U.S. Social Security Administration. Also joining us from IBM is Nicole Gardner.

So, Michael, in the last segment you mentioned that a good leader communicates their vision and how they’re going to get there. So I’d like to turn our focus on the strategic plan you folks are developing and your five-year strategic plan. Can you give us a sense of the strategic vision that’s outlined in the plan, some of the goals? But, more particularly, give us some insight on how you went about developing it?

Michael Astrue: So I think the most important thing that we did for each of our strategic plans, particularly for the first one, was to improve our management information. We kept a number of statistics, in some sense too many, because if you asked a simple question as to how long does it take us to do X, you would get three or four different answers depending on which component in the agency was recording that. And we did not have standard definitions. And so we would talk past each other, we would confuse the Congress. You couldn’t even really set goals in some sense because everybody was defining the task very differently.

So one of the things that we spent a lot of the first 18 months doing was, first, making uniform the definition for everything that was important into terms of defining whether we were succeeding or failing. And then when we got past that step we were able to start asking, okay, what else should we be recording that we’re not? And that’s still an ongoing process. We’ve got a couple more data elements that we’re trying to get into our packages now.

But what a manager at Social Security can do today is go on the internet, there’s a monthly report, it comes in very quickly after the end of the month, that gives us the monthly and the annual numbers for how we’re doing on everything that we think is important in terms of measuring performance, with a little color coding to make it a little easier graphically, whether we’re going in the right direction or the wrong direction.

And I think that’s tremendously important. You have to be careful about managing just to metrics because you can have unintended consequences, and that’s a mistake that a lot of rookie and poor managers make. You have to remember that quality is always important, and that doesn’t always show-up in metrics. So we’ve made very conscious decisions to blow to pieces certain metrics progress that would impress the Congress, and impress the outside world in the name of quality.

So, for instance, pending cases is an overrated way of measuring backlog because it doesn’t matter how many people are at the line in the grocery store, what matters is how long it takes to get to checkout. And some people miss that. But we decided to take a hit on close to 5,000 cases maybe that are pending in the hearing process in the name of quality because we looked at our numbers, looked at our studies and decided that if a judge was doing more than a certain number of cases he just couldn’t be doing it in a quality way. And we looked at the judges who were exceeding the threshold that we’ve established now as the maximum and said they’re all cutting corners in one way or another.

So we deliberately made our progress on backlog reduction harder in the name of quality. And so there’s no absolute numbers you can look to measure that kind of quality, but that was a qualitative judgment that was made with very careful research. And it was absolutely the right thing for us to do. So the metrics are the first step, but you should never make the mistake of managing just on the metrics because that’s the first step in the inquiry, it’s not the whole inquiry.

Michael Keegan: May I ask, though, to what extent is the fiscal realities of the day factored into your shaping your new strategic plan? Were the assumptions based on the realities?

Michael Astrue: They were, and I think it made it much harder. The plan that we did in ’08 was predicated on some realistic optimism about somewhat better Congressional funding, and that was, in fact, right because we had three years where we did quite well with the Congress and it was enormously helpful in terms of bringing down the backlogs.

It was much tougher writing a strategic plan in the context of two straight years of budget cuts, losing 7,000 employees over two years, because it’s very hard to take on much in the way of new initiatives when you’re just trying to hold on to kind of what you have.

So we did the best we can, we did the best we could with what we had. It’s not as visionary and optimistic a document as the previous one, but I think it’s realistic. I think it lays out for the employees and for the Congress some fairly realistic goals for what we think we’re going to be able to do in the environment. If the environment shifts we could do better, but for the moment I think it’s a cautious document because I don’t think you should overpromise in something like that.

Nicole Gardner: Over the last four years or so how has your agency demonstrated the nexus between adequate funding and being able to achieve the mission? And what are the external factors that really affect whether you can meet your strategic vision and really aspire to achieve the mission?

Michael Astrue: Sure. Well, as you get toward the end of your term you do think a little bit, you know, what have I contributed? Have I lived up to my own expectations? And I think one of the areas where I’ve been able to make a significant contribution was to change the legislative strategy when it came to discussions about funding?

The agency is a wonderful place, and they are some of the most motivated, can do people possible, but I think for a long time we went up to the Hill with that sort of can do attitude and we really ended up hurting the agency and the people that we serve because we’d go up and we’d ask for what we thought we needed. And the response would be, well, that’s nice, but can you do it with that minus 5%? And the answer is, well, it’d be a lot harder, but we’re a can do agency, we’ll do it.

So we did not want to tell the Congress what would not happen if they did not fund at a certain level. And we are so big and so complicated we felt not only the very prominent disability hearing backlog, but lots of other backlogs, too, on work that is still very important to get done on a timely basis. And that was not discussed the way that it should have been.

So going back to what I said earlier about clear, candid communication with employees, I may be wrong but I’m consistent because I believe in exactly the same thing when it comes to communicating with Congress. And for awhile that worked extremely well. We had a three-year stretch where we did I believe on average better than any of the other large domestic agencies. Congress heard the concerns, decided that we were right, and responded.

The last couple years, you know, it’s been mostly across the board funding, and I think that hurts us disproportionately for a couple reasons. One is Congress put what was essentially operating money into the Recovery Act and then didn’t count that as part of our baseline going forward. So we started at a lower baseline than comparable other federal agencies.

Second, we don’t really have very much, other than buildings and people, in terms of expenses. So if you’re a grant making agency you might not like it, but you can do 3% fewer grants and 3% less money and you’ve got some flexibilities in responding to cuts. We don’t have those. We have entitlements. We have people. We have buildings.

And so what is happening, and I think Congress still is having trouble understanding the wreckage that it’s creating with these kinds of reductions in staffing. We have no real choice but to consolidate facilities. And so they all think that they’ve done the right thing when they voted the funding level and they talk about government becoming leaner, more innovative and efficient. But then when you do the things to become leaner and more efficient, if it affects their districts they become extremely upset.

So we’re going through, having these conversations over and over again, unlike in the past where sometimes there might be some room to make some changes, we have our back against the wall. We’ve got the insufficiency. I mean we’re really talking we spend this money we’ve got criminal penalties. And so we’re having a lot of unpleasant conversations with the Congress because we are consolidating facilities. It’s not just the money we save by consolidating facilities. We can’t hire. We can’t backfill employees.

So, particularly for smaller offices some of them are getting to the point where depending on who chooses to retire, if we can’t backfill they can’t serve the public anyway. They’re sending people to the next office over because they don’t have the expertise in the smaller office to deal with the person’s need. And every Congressman looks at his own office and says, well, it’s only this amount of money. Can’t you make the change for me? But we can’t do that for 535 members of Congress. We have to take hundreds of millions of dollars out of the budget, and it’s hard. And so it’s been a very difficult couple of years.

Michael Keegan: Michael, I’d like to switch to a specific program, the Disability Program. I know it’d be nice for our audience to understand a little bit about it before we delve into some of the successes you’ve had in re-architecting it, if you will. What are some of the key steps in the disability process?

Michael Astrue: So I think the first thing is to realize we really have two programs. It’s very similar in terms of the programmatic requirements. But one is an insurance program. It’s something that all Americans are entitled to if they pay into the system. The other is a welfare system. It’s income- and asset-based. So we have Title 2 is the insurance program, Title 16 is the welfare program.

And the basic standard is a person has medical impairments that prevent them from doing work that exists in the national economy for a period of 12 months or more. And what we’ve tried to do is to, A, use much more up-to-date medical information. When I started we had regulations for significant areas of medicine that had not been updated since the 1970s. And I knew from Biotech that the world changes much more quickly than that. So now we’re on the cycle where we’re trying to keep them all updated, at least every five years, and more often if we can. And we’re pretty much living up to that.

The other thing is there had been attitude in the agency, generally that if diseases or conditions were much below the orphan (ph) drug line, those were sufficiently rare that we didn’t have to provide terribly detailed guidance. But when you aggregate, all those that’s an awful lot of the cases. It’s where a disproportionate amount of the time, money, and effort were going. It’s where disproportionate error was.

So one of the things that we’ve done is go into much more detail, into much less common diseases and conditions to address that. And we’ve also been able to fast track a lot of the rarer diseases and conditions by picking them out by computer in advance. And many of these are devastating, and there’s no question that basically the diagnosis should allow an allowance of disability. And then there’s a group where you have to do a limited review, but the overwhelming number of cases should be allowed.

So we’re pulling those out now in the frontend. We’re doing about 6% of our cases that way, and those are generally decided in sort of 10 to 15 days on average. So that’s a big improvement. Before, when the machine went on automatic pilot for the standard cases, we’d ask for an enormous amount of medical evidence, we’d ask for an enormous amount of vocational evidence. If the disease or condition were obscure we’d have to go out and try to get specialists to advise us on those things, when really there was only right answer. So that’s all wasted effort.

So that has, I think, been one of the great successes of the agency, and we’ve received some awards and things like that for the program, and other agencies are starting to look at if there are ways they can duplicate that with their programs.

Nicole Gardner: So he just answered the next question really, which is fine, I mean we can elaborate a little bit more maybe on compassionate allowance?

Michael Keegan: It’d be nice to do it – actually, it would be nice to just talk about the QDR, specifically anyhow?

Nicole Gardner: Okay, QDD, yes, okay. All right, so sorry. So, Michael, SSA, and we talked about this, you mentioned before the increase in the disability and reconsideration claims as a result of the economy, which produces a backlog. In April 2010 you testified that SSA’s plan is to reduce the initial claims backlog to a pre-recession level, 2014, by 2014. Would you elaborate a little bit more on SSA’s efforts to improve the timelines and the quality? And talk a little bit about something called quick disability determination and compassionate allowance? Tell us about that and some of the other initiatives?

Michael Astrue: Sure. So let me start by saying we have the states do the first two levels of review before we get into hearings and appeals. And, of course, the best way to solve any backlog problems, to the extent that you’re making errors to pick them up quicker and earlier in the process. And we’re doing a pretty good job of that.

And one of the ways we’ve done it is we’re using much more sophisticated software for structured review and prompting with examiners in the state level, a system we call ECAT, and that’s had a substantial affect on improving quality.

There are other things that you do to improve quality, but the other thing that we’ve done that I think fairly dramatically improved the system, is that we have two types of fast track cases. We have the compassion allowance cases, which are basically the cases where by definition you’re disabled. I mean if you have the same form of rare brain cancer that Senator Kennedy had, which my father also died of, there is no survival from that. You know that with medical certainty. And someone that has that confirmed diagnosis should just be given benefits as quickly as possible, so that’s what we do. It’s sort of a radical concept.

And you can do it with an electronic system. The reason that wasn’t done in 1985, because I asked that question when my dad, you know, I had to do the forms for my dad in 1985, is that you just couldn’t pull them out efficiently in a paper based system. But you can electronically, and so we do. And what we also do is there are cases that are almost in that category but not quite. So a number of cancers are often very depressing, but there are some subsets where there’s a little bit more reason for being optimistic, so someone has to check to make sure that someone with a particular cancer is in that subset.

But right now about 1% of our cases that are growing more rapidly are compassion allowances. About 5% are QDD cases. And we think that number, you know, we took an educated guess. It was largely my back-of-the-envelope estimate with our 2008 plane, that we could do 6% to 9% of our cases that way. It looks like we’re going to hit the upper end of that range. We are working with NIH, which has been very helpful. They’re using some sophisticated programs and templates to identify diseases and conditions that look very similar on key dimensions with our current compassion allowances, and that looks like a very productive partnership. So we have as many as maybe 25 more that we’re going to be announcing in the spring.

And, also, when the economy recovers, the percentage of cases handled on the fast tracks will increase because almost none of the 600,000 or so extra cases we’re getting that are recession related fall into these categories. They’re people that have medical challenges but had been working, and a lot of times don’t meet our definition of disability. So I think when the profile of cases goes back to something approaching economic normalcy and we do another round of expansions with a collaboration with NIH we probably will be up around the 9%.

Nicole Gardner: So just to continue talking about disability a little bit more, the timeliness and accuracy of SSA’s disability decisions and the hearing at the adjudicated judge level is at the forefront of Congressional and agency concerns as it has been. What is SSA doing to eliminate the backlog of the hearings and prevent their reoccurrence, as well as how are you leveraging technology and enhancing the training for the judges?

Michael Astrue: I could go on at great length. A lot of this is really for the first time looking seriously at our hearings operation as an operation. And you’re doing fairly basic things in terms of operations management. So we’ve moved to uniform business processes. We’ve asked the hard question and gotten consensus among the management judges, what’s the best way to do certain things?

When we started we had about 142 hearing offices and there were at least 142 different ways of handling a lot of the things that we do over and over again. So although that was often an emotional and difficult process, we got a fair amount of consensus that there were certain best ways to handle cases. And so that has helped particularly some of our least efficient offices move-up very quickly.

We screen judges much more carefully than we did before. We never did background checking before. So a lot of the judges that became dysfunctional, shame on us, it was knowable that they were not the caliber of people who should be judges. So we’ve had almost no discipline issues with the 800 judges that we’ve hired on my watch, and we’ve had very high caliber people.

We’ve also had success in persuading the Office of Personnel Management to refresh the list on a regular basis. When I came in it had been almost 10 years since they had a new register of judges, and you ask in any sort of business organization if you were hiring only from resumes that you had 10 years before how good is your hiring going to be.

So I think we’ve hired very good people. We’ve checked their background carefully, so we think they’re going to be responsible judges. And I think the most important thing, and I saw this this morning as I swore in another 29, they’ve signed up for the mission. I mean we’ve been very clear as to what we’re about, we’ve been very clear for the first time that there are productivity expectations, that there are behavior expectations, that they’re at the high end of the federal pay scale, and that’s a great thing, but there are responsibilities that come with it.

And I think there are loads of wonderful people out there that will sign-up for that, and I think we’re getting them. And so our judges are much more productive than they’ve ever been before. We’ve also opened up career ladders for the support staff because we used to have a lot of dead-end jobs in the hearing operation, and that’s not true anymore. And we’ve had a record number of people from within the agency ascend to become administrative law judges. And I think that’s great because I think that ambition of that type is a motivator.

And so I think we’ve improved morale, we’ve improved productivity, we’ve improved processes. We do a lot more with technology. We use video now for a lot of our geographically distant locations, whereas before we were using state-of-the-art 19th century judicial administration techniques and riding the circuit. And that made sense in 1872, it doesn’t make sense in 2012 because the judges are very scarce and an expense resource, and if they’re blowing two full days driving 300 miles to hear two cases or one case, you know, it’s just not a very efficient use of resources.

We’ve also realized that local backlogs happen fairly quickly, and if we don’t have mechanisms to support hearing offices from some sort of centralized location that we can have local backlogs very quickly. So we now have several national hearing centers that hear only cases from the most backlogged areas by video. And that’s been enormously successful in bringing down some of the outliers.

So not only have we brought down the average wait to a hearing from about 540 days to about 340 days, we’re much tighter around the mean. By the end of this year because we also set targets for reducing the number of aged cases, the cases who have been waiting the longest, we will be able to look up and say nobody is waiting two years anymore, whereas five years ago, we had people waiting four years.

Michael Keegan: Well, keeping on that line of thought around service enhancement, I’d like to understand how SSA is leveraging health IT and applying it innovatively to enhance service?

Michael Astrue: So we have been very excited by health IT from the get-go, and the Recovery Act encouraged us to spend approximately $25 million getting ready for that. So we’ve done pilots. We work with Med Virginia. We’ve worked with a couple other of the smaller entities around the country that are pretty much already there in terms of supplying electronic medical records. It’s worked extremely well from our vantage point in time.

It’s not quite as well as we dreamed in the beginning because we discovered that what was coming over the transom had a lot of extraneous reimbursement information, other information we had to screen out, that we had to do some redesigns of our business processes to handle some of the information that was coming in somewhat differently. But even with those fixable problems we were cutting our review times by probably in the neighborhood of about 40%, and I think we can do better over time.

The problem for us right now is just very few insurers are there yet. It’s coming, but it’s painfully slow. I mean there was tens of billions of dollars in the Recovery Act provided to the private sector to accelerate this, and it’s coming but it’s slow. And, again, we have a major insurance company that we’ve been working on an agreement for some time on that’s pretty close, I hope, to closure. And at least in one part of the country I think we’ll start to see what this will do for us. And I think it’ll be very impressive. I’ve told people that we’ve had a lot of change. I think people think that, okay, we’re settling down to sort of the new normal. I can tell you it’s not going to happen, that when health IT comes your head is going to snap back and say it’s amazing how much things are changing. And it will be changing in a good way.

So I’m excited about it. I mean I’m a little frustrated because five years ago I thought all the improvement would happen on my watch, and that’s not going to happen. At this point it’s going to be three more years probably before it’s common enough in the private sector to affect most of what we’re doing. But we’re getting there, and it’s exciting. And I think that probably we’ll be able three years from now instead of setting 270 days as our norm for hearing an appeal, and maybe 200 days will be realistic. Usually we do 60 to 100 days for state first level reviews, we might be able to talk 40 to 60 days.

So the whole process may speed-up. We may be able three years from now to talk about eliminating the second step in the states because not only will we do things faster with health IT, it’ll be much more accurate and we might not need the second step at that point. I think it’d be premature to say that it’s for sure going to happen, but it’s something that people ought to be keeping in mind as we go down the road because not only is chasing down medical records one of our biggest costs, it’s also one of our biggest sources of error in incomplete medical records. A lot of time we don’t even know that a medical record is incomplete. A lot of times the person applying doesn’t know that the medical record is incomplete.

The first time I sat in on a hearing it looked like the person was going to be denied and she was well represented by a lawyer, and then it came out with some good questions from the judge at the end that the woman had a very serious case of Hepatitis C, and here she was at the third level of review, and we didn’t know, her lawyer didn’t know.

So I think this goes back again to good communication. If you get the information exchanged in a better way early in the process, everything will not only work faster but the quality will be higher.

Michael Keegan: How is SSA improving its service and stewardship efforts? We will ask Michael Astrue, Commissioner of the U.S. Social Security Administration, when our conversation continues on The Business of Government Hour.

(Intermission)

Michael Keegan: Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today is Michael Astrue, Commissioner of the U.S. Social Security Administration. Also joining us from IBM is Nicole Gardner.

So, Michael, today SSA faces many challenges regarding the technology and infrastructure they have. I’d like to get a sense of what you’re doing to address some of these challenges, i.e. data consolidation using the cloud?

Michael Astrue: Yes. So I think five years ago we had a huge IT infrastructure problem and, again, because we weren’t communicating with each other we didn’t even realize how bad it was. So we had a National Computer Center that was designed in the late ‘70s, built in the early ‘80s with a 20-year life expectancy that was getting close to 30 years old. And we were running out of capacity to put more servers in, and more ominously the utilities were built in such a way, for instance, that the pipes for the cooling that we need, we use an enormous amount of water and we use an enormous amount of electricity, we’re built parallel.

So after, you know, we had pipes built for the 20-year expectancy, so what happens is they start to corrode, they leak, and then they short into the system. So that’s a real risk for us, in addition to the facility just not having been built for today’s technology and not having the capacity we need going forward. So we needed to move on replacement on that.

The agency had started building really its first backup facility. And to think that an engine that pumps almost $70 billion a month into the national economy had no backup capacity is shocking. The backup plan in an emergency was to run to a commercial facility in New Jersey, you know, two field office managers would get the call, say run to the facility, reserve as much time as you could buy. The maximum that they could buy would backup about 10% of our capacity, and the transition time to get up and running in New Jersey would have been very long.

So the good news is that we’ve made substantial progress toward fixing both programs. We have the second facility now in the south that backs up 100% of our capacity. We’re able to – I was able to change the design of that really at the last minute, make some additional investments, so instead of backing up 50% of our capacity it backs up 100%, and that’s great. And we can now flip from one to the other in about five and a half hours and then another five and a half hours to test and make sure that we’ve done it right. And that’s a huge improvement.

Congress also in the Recovery Act approved the money that we need to build the new primary facility, and so that site has been purchased, site preparation is ongoing, and we’re planning on having the ground breaking in April. So that’s a longer term project, but that will allow us to meet our base needs.

We’ve been a little careful about the cloud for security reasons, and it’s also just capacity reasons. We’re running one of the largest computer systems in the world. We have days where the way that the systems people measure transactions where we have 800 million transactions. So it’s a huge facility.

And so the Google’s and the Microsoft’s and the people that are building cloud capacity, they’re building it for the typical users. And so it’s enough capacity for most government agencies, most corporations. It’s not for the Social Security Administration. Also, given the incredible sensitivity of a lot of the information we need protections that are often not, at least for the moment, offered in the cloud. So it may be that at some point the cloud is a competitive alternative, but when we made these decisions on what we needed and why, 2007, 2008, 2009, the cloud really was not competitive at that point.

Michael Keegan: Well, I’d like to switch gears about that and focus in on program integrity – go from infrastructure to program integrity, which you referenced earlier. If I got this right, I believe that SSA issues about $700 billion a year to about 60 million people – how, what are you doing to reduce improper payments and also increase overpayment recoveries?

Michael Astrue: So we had actually been moving backwards for a number of years in terms of accuracy and program integrity. We’re not still back to where we’d like to be, but at least we’re moving back in the right direction. So some of it is our bread and butter, which is doing continuing disability reviews, looking periodically at people on the roles and making sure they’re still disabled, had dwindled to almost nothing.

So we’ve, despite our budget issues, increased our continued disability rules pretty much year by year. We’re not up at the optimal level yet, but it’s better and you can see the impact on the bottom line. We’ve saved the taxpayers for full medical review about $10 for every administrative dollar that we spend. And when we just do a work review it’s about $7 for every dollar we spend.

We have some new initiatives that are very exciting. So for the welfare based disability program where assets are an issue, we have a new system where we can check bank records very efficiently to identify unreported bank assets. And the numbers may fluctuate as the system is up and fully mature, but right now we’re getting in the ballpark of a 20 to 1 return for taxpayers with that. And so we’re excited about that.

We’re looking at the feasibility of doing some similar things in real property, and it is one of the advantages with all the databases that are out there, that there are opportunities to engage in matching programs to prevent fraud that just weren’t technically feasible, even three, four years ago.

Nicole Gardner: So there was a study done by the Partnership for Public Service and the Center for the Business of Government called From Data to Decisions, the Power of Analytics. How is SSA demonstrating measureable improvements by using analytics, how are you using analytics, and what are some of the data driven decision-making that –

Michael Astrue: Pretty much skunk work style, which I’m proud of, by some people and called policy feedback. And so we’re now able with this tool to snake very efficiently through our own records to find out exactly sort of what’s happening. So five years ago, you came and said, well, do we have an issue with the accuracy of our determinations in colon cancer, because it looks like it’s very different in some parts of the country than the other?

Well, there was no very efficient way to do that except to ask the Inspector General or the Office of Quality to do a pretty labor intensive study. We can now sit in front of a computer and very quickly push a button, find where the outliers are, and then go in case by case in the outliers.

So in the example, the demonstration I saw, where there were some outlier statistics for head and neck cancer, we were able in probably about half an hour to go and look at the individual case files in three or four of the states that were outliers, and it was pretty clear to someone who was not a trained examiner, such as me, that there was confusion between esophageal cancer and head and neck cancer. And so we could say, okay, we need to go, and we need to clarify for those states how they’re supposed to be handling things. So that kind of thing we’re doing more and more of, and it’s very exciting.

Another thing that we did, we had a time honored algorithm for allocating staff in field offices that a number of our people were very attached to. And they felt it was almost unchallengeable. But you went out into the field and you looked at what happened, and you saw that there were certain disparities and that things weren’t adding up, and that there were some offices with almost no waiting room traffic, and some that were backed up terribly.

And I thought I started to see some patterns there. So really made people go back over about a 12-month period and bang away on to challenge the algorithm to see where the waiting room traffic was and to see why we saw these disparities. And sure enough at the end of the project we could see that the algorithm had not changed and adapted to changes in the SSI program from 1974. And the SSI work is very labor intensive, and it gets more labor intensive every year because Congress has not put an inflation adjustment on the asset and resource limitation. So every single year it is more labor intensive to do SSI cases than the year before, but our algorithm hadn’t changed in 20 plus years.

And so, you know, we try to be catalysts for asking those types of questions and using the enormous wealth of information that we have to try to address problems that we can see or suspect in our systems.

Nicole Gardner: So still on the theme of citizen services, what has SSA been doing to transform the customer service function, and to what extent are you expanding the availability of online and web capabilities?

Michael Astrue: So, with all due respect to all the other federal agencies, we’re clearly the leader when it comes to electronic services. I had mentioned the Michigan studies that confirm that. And so we are embracing this very enthusiastically. We embrace usability. We not only have an office that specializes in it; we have outside contractors look at it. And for anyone that’s significant I make them run it through for me personally and I pick away at it, too, before it goes up and online. And I think that’s made a big difference for us.

We’re trying to do things that people thought were not possible before. So, for instance, one of our most popular services is any American can go online at socialsecurity.gov and get a personalized estimate of their retirement benefit. And it not only, you know, with the old paper statement that went out we just gave you one number that was based on one retirement age, and that’s helpful but in some ways it’s also a little counterproductive because part of the goal of the exercise is to get people thinking about their alternatives, not just thinking about one date.

So what we’ve also tried to do is move away from sort of guiding people towards early retirement, which is effectively what we were doing, in my opinion, to being less directive but giving a lot more information and giving people for the first time the opportunity to run retirement scenarios. So if you’re trying to figure out your planning you can sit in front of your own computer and you can say how much would I get if I retire at 62? How much at 65? How much at 70? And while that’s important for people, like me, it’s more important for people like you because statistically you’re probably going to live six years longer than me.

And so when we look at the growing number of the older aging population, people in their ‘80s, ‘90s, and increasing number of centenarians, they’re heavily female. And so if a woman makes a bad choice at the retirement, it’s probably something that she’s going to have to live with a lot longer than if I make a bad choice. So we’re trying to get people thinking about those things, but not necessarily telling them what to do.

Another thing that we do in that regard with the estimator, we got some great input actually from our British colleagues on this – is people have a tendency to underestimate their life expectancy by about five years, which also could make you make a bad choice. So we now have a rudimentary lifetime estimator, as well, right there with the retirement estimator, so you can not only think about how much money you would get at certain ages, you can plug-in personal information and see statistically how long you might be able to live, at least it plants the thought that maybe you ought to be planning for living a little longer than you might think that you would live.

Nicole Gardner: Which could be a good thing. I’ll remember that. Yes, I will remember that. So we talked a little bit about the fiscal constraints that exist today, and, obviously, in the situation where there are all these difficulties, the style of the leader is very important. You mentioned your distinct style before. Reflecting a little bit on your leadership of SSA, can you tell us how you keep your employees focused and motivated in the face of some of these really pretty tough challenges and changes that you have to make?

Michael Astrue: Well, I think the most important thing is treating them with respect. I mean I think that this is a group of people who are extremely talented. They could have done other things with their lives than the things that we try to do.

Michael Keegan: What are you doing to make sure you have a highly trained and competent workforce?

Michael Astrue: So we have tried to do several things. One is we’ve expanded our outreach a little bit. I think that we had sometimes and some parts of the country been too narrow in our hiring, and because money came unpredictably and you often have to hire quickly I think that it’s a little harder, for instance, to recruit disabled employees under those sort of circumstances. So we’ve had special programs to make sure that when we can hire that we have pools that reflect our expectations in terms of a diverse workforce.

And so that I’m quite proud of the fact that when the Recovery Act money came we hired about 20% of the agency in a year-and-a-half, and we did extremely well on any objective metric of diversity including disabled hiring where we’re basically the best in the federal government, except for the EEOC. So I think planning and being prepared on the hiring.

We’ve also recognized that our main source of hiring is coming up from the grassroots, from the field, and I think that’s good, and I think that we’ll always be that way. But we’ve also said, you know, there are certain areas where we probably need to be a little bit more aggressive about getting in some people with a different kind of background and a different kind of perspective, particularly in the systems and IT areas.

So we’ve started a program called the Hearty Fellowship Program where we only hire from the top 15 IT graduate programs. And we actually had some skepticism internally, given that with civil service restrictions we can’t offer very much money and very much in the way of anything that would look as a perk. I mean we actually present face time with me as one of the perks, so go figure that might work.

But the first year we got a very talented group, but we weren’t turning away topnotch people. The programs really caught on because we were taking in about nine, and we got 32 applications. We turned down remarkable people from Caltech and MIT and stuff because the class is so strong.

So I think what those people will do, where typically our systems people start in the field and learn systems later in their career, or more recently came in from a contractor, these are going to be I think the people that are going to be our big think, IT strategic planners of the future. And so far it seems to be going well. We’ve only lost one since we started the program, and they’re great individuals. And they challenge our people a little bit, you know, they’re confident, as they should be because they’re very good, and they look at our world a little differently than we have, and that’s a healthy tension for us. And I think that a significant number of these young people are going to be the top leaders of the agency 10, 20 years down the road.

Michael Keegan: What does the future hold for the U.S. Social Security Administration? We will ask its Commissioner, Michael Astrue, when our conversation continues on The Business of Government Hour.

(Intermission)

Michael Keegan: Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today is Michael Astrue, Commissioner of the U.S. Social Security Administration. Also joining us from IBM is Nicole Gardner.

Michael, I had the pleasure to talk to many of my guests about the use of collaboration and partnerships among federal agencies and the private sector to achieve mission and program outcomes. I’m wondering how is SSA leveraging both a collaborative environment but also partnerships to do this?

Michael Astrue: Sure. So, with all due respect to a number of the agencies that we partner with, I think the one that has been the most remarkable and most helpful for us in recent years is under the Memorandum of Understanding we have with the National Institutes of Health.

So particularly with our fast track disability programs, not only for each of the public hearings have they sent a senior person there to help us work through the testimony, ask the right questions, think about the diseases and conditions in the right way, they’ve done a remarkable research program recently where they’ve been taking the information in our databases, profiling the diseases and conditions of the fast tracks, and comparing them to diseases and conditions in other databases that they access to say what else looks like those? Maybe these are the things that Social Security ought to be adding to the list.

Because we had a lot of the low hanging fruit in the beginning, we hit 100 diseases and conditions last year. I’m hoping to double that in the next couple years, but it’s getting slower and harder because we’ve done the easy ones.

But they came in just with their preliminary results a couple months ago, and it rocked my head back. I mean they had 25 diseases and conditions that on not just the initial look but now as we work through it more carefully, most of those are going to be compassion allowances. So that’s going to accelerate our progress with the program enormously. There’ll be tens of thousands of Americans I’m persuaded by the end of the year who will be getting the benefit of the fast track because of the partnership with NIH. So they’ve just been absolutely topnotch, and I can’t say enough good things about what they’ve done for us.

Nicole Gardner: SSA has continued to be recognized as a great place to work in the federal government. I know you’re really proud of that, and you talked a little bit about this impressive program in the last segment, with the IT professionals. What can you tell us about what contributes to that great place to work? That’s an impressive achievement. And where would you put the credit for getting that great reputation?

Michael Astrue: Well, I think most of it is the history and the tradition and mission of the agency. We traditionally have been a great place to work. We had slipped a little bit, in recent years we had slipped out of the top 10 on the partnerships list, but we’re happy to have been back the last three years, and aspire to do even better because I am very competitive.

And I think as we’ve looked at what we’ve done, I think it goes back to the first question, Michael, that you asked, I think the fact that we communicate better than we have before is the biggest thing perhaps that we’ve changed in terms of employee satisfaction. I can’t change the salaries. I can’t change the working conditions in most cases very quickly. I can’t change too much, the people that they work with and the attitudes or anything that they come in with. A lot of things I can’t change.

But what I can change is the sense that there are people at headquarters that are very committed to supporting what they’re doing, are concerned about they’re doing their work well, doing it efficiently, making sure they’re secure in the workplace and as we make changes to address those goals, to explain what we’re doing and why.

And so I think it’s not only the understanding of the particular things that helps, it sends a general message that we have a culture that is not self-satisfied, that realizes it needs to focus on continuous improvement, and that it values the mission. And I think that if you’re on the front line, knowing that the people 12 layers up believe in that I think that’s the most important thing that you can do in most ways.

Nicole Gardner: So, Michael, you’re five years into a six-year term. Congratulations on your longevity.

Michael Astrue: Not till Sunday, I don’t want to be premature yet. You never know in Washington.

Nicole Gardner: Forty-eight hours ahead of time, let me be the first to congratulate you. What are you most proud of in terms of what you’ve done? And what do you want to be your legacy as Commissioner?

Michael Astrue: Well, people have been asking me that with more regularity. And part of what I try to do is try to get people a little less focused on that. I jokingly refer to legacy as the L word around the office, and the reason for that is I think in a lot of agencies, because I’ve spent almost 14 years in the federal government now, and I’ve seen a lot of agency heads, and I’ve seen as you get to the end sometimes a sense that, oh, my God, I have to establish my legacy, and things are raced out at the end, and they don’t work very well, and they’re actually counterproductive. And a lot of times people actually, ironically, end up with a negative legacy because they’re too worried about legacy.

So my feeling is I think that we’ve done some very important things on my watch. I take a lot of pride in the fast tracking of the disability programs. Introducing high-quality electronic services, I take a lot of pride in. I think moving a long way to change the direction in terms of the physical IT infrastructure to make sure that the checks continue to go out on a regular basis, that’s incredibly important.

We have some other longer term projects that won’t be finished on my watch that we started. I’m proud of that because some of these things take a long time. We’re using a 1938 tool that labor stopped updating effectively in 1977 for a lot of our vocational decisions. And I think commissioners were discouraged about taking that on because it’s a very long-term and expensive project. So even though, even under duress, with a lot of competing demands for resources, I just thought it was important to start that.

So we have started that. We’ve been working on it for a number of years. We probably won’t see any benefit in the agency for two more years, but I think it’s important that we replace the dictionary of occupational titles.

So there’s a whole set of things that we’ve done or brought fairly far forward that I think for better, for worse will be my legacy. And I think in the last year my feeling is the focus needs to be on bringing those as far along as possible, driving the backlogs down as far as possible, and it really isn’t a smart thing to start anything tremendously new and ambitious in your last year unless you absolutely need to do it and you can say with a lot of confidence the next commissioner will want to come along and finish the same thing.

Michael Keegan: So, Michael, what advice would you give someone who is thinking about a career in public service?

Michael Astrue: I think it’s a very ennobling career. It’s a tough time right now. I’m proud of the fact that both my children have picked public service. So my wife went into labor 25 years and one day ago when I was doing my first briefing for the Commissioner of Social Security, so I’ve been thinking about him a fair amount. And he is an Army Intelligence Officer. He went out to learn Farsi because he decided that’s what the Army needed most from him. And I have a daughter who is 16 months younger, who is in Teach for America, and she’s in a very, very difficult inner-city school in Nashville, Tennessee, working in a very difficult environment. But she’s very committed to what she’s doing. And most of the Teach for America kids work very hard, they do great work, they do two years and they go to something else. And my daughter is going to stick with it. So I’m very proud of both of them.

And so I think it’s out of favor now, but we’re only in this world for a fairly brief period of time, and I think, at least for me, I think you want to take satisfaction away that in some way, even in a small way, what you’ve done has made the world better. And I think it’s much easier to feel that way in public service than a lot of other things that you can do with your life. And so that’s what I tell people.

Michael Keegan: Well, I want to thank you for joining us today. This is the second time you’ve joined us on the show. It’s been wonderful having you, but, more importantly, Nicole and I would like to thank you for your dedicated service to the country.

Michael Astrue: Thank you.

Michael Keegan: This has been The Business of Government Hour, featuring a conversation with Michael Astrue, Commissioner of the U.S. Social Security Administration. My Co-Host from IBM has been Nicole Gardner.

Be sure to join us next week for another informative, insightful, and in-depth conversation on improving government effectiveness.

For The Business of Government Hour I’m Michael Keegan, and thanks for joining us.

Announcer: This has beenThe Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the Web at businessofgovernment.org.

There, you can learn more about our programs, and get a transcript of today's conversation.

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